Virtual Real Estate Closings in Canada: A Step-by-Step Guide
Why Choose Virtual Real Estate Closings?
As the real estate industry evolves, so does the way we buy and sell property. Virtual or digital real estate closings have become increasingly popular in Canada, offering a streamlined, convenient process that saves time and effort. Choosing a digital closing is particularly beneficial for busy buyers and sellers, those buying in different provinces, and anyone looking for a transparent and efficient process.
Virtual closings make use of online tools, secure document signing, and virtual meetings, allowing all parties—buyers, sellers, agents, brokers, and lawyers—to complete the entire transaction without meeting in person. This shift to digital also promotes safety and accessibility, reducing the need for physical paperwork and in-person visits to legal offices.
Virtual Real Estate Closing Process: A Breakdown
A digital real estate closing simplifies the traditional process into a few online steps. Here’s how it typically works:
- Initial Consultation & Discovery
The journey toward a digital real estate closing often begins with a referral from a real estate agent, a mortgage broker who identifies that their client would benefit from a virtual closing option or even a lender. If a buyer or seller has a tight schedule, is buying remotely, or simply prefers a streamlined process, the agent or broker may recommend a digital closing. Once the client agrees, the agent or broker can initiate the onboarding process, gathering essential information and connecting the client with a trusted real estate lawyer who specializes in virtual closings.
From here, the client can attend an initial consultation with their lawyer via a video conferencing tool like Zoom. In this meeting, the lawyer walks the client through each step of the closing process, detailing the necessary documentation, timelines, and any specific legal requirements based on the province. By conducting this meeting virtually, buyers and sellers across Canada can participate from wherever they are, making digital closings accessible and convenient. This initial consultation is not mandatory, and can often be skipped if the client trusts the agent or broker enough.
- Document Collection and Preparation:
After the initial consultation, clients, agents, or brokers begin securely uploading all necessary documents—such as purchase agreements, title searches, and mortgage documents—onto a secure dashboard, like Deeded. This platform provides a centralized location where the real estate lawyer and legal team can review and manage each document safely and efficiently.
Throughout this document collection and review phase, the Deeded Dashboard offers direct visibility to all transaction participants. Buyers, sellers, agents, and brokers can easily see which documents have been submitted, reviewed, and approved, as well as the current stage of the closing process. The dashboard provides real-time updates, notifying all parties immediately via email, text, or phone call when documents are completed, approved, or if there are any issues that require attention. This transparent and streamlined system ensures that everyone involved is informed and aligned, keeping the transaction on track for a smooth, timely closing.
- Electronic Document Signing
After all necessary documents are reviewed and approved, the process moves into the signing stage. Thanks to electronic signing platforms like DocuSign, all parties can securely sign documents online. Electronic signatures are widely accepted in Canada and carry the same legal weight as traditional signatures, making this step fast, convenient, and fully compliant. The digital signing stage saves time by allowing everyone involved to sign from their own location, ensuring the process remains efficient and seamless as the transaction nears completion.
- Funds Transfer and Final Review
The closing process includes transferring funds electronically. Buyers, sellers, and lenders coordinate with the lawyer’s office to finalize the transaction. All details are reviewed, and when everything is complete, the final documents are registered digitally.
- Virtual Closing Meeting
Finally, the closing meeting occurs virtually, where the lawyer provides the necessary guidance and confirms that all documentation has been correctly signed, transferred, and filed. And congratulations, your deal is closed!
Understanding the Legal Aspects of Virtual Closings
In Canada, real estate transactions are regulated by provincial laws, meaning that digital closings are designed to comply with legal requirements in each province. Virtual closings must meet specific standards to ensure legality, security, and privacy, and real estate lawyers play a crucial role in this.
When completing a digital real estate closing:
- Compliance: Real estate lawyers ensure all digital signatures, electronic documents, and virtual interactions meet Canadian legal standards.
- Privacy and Security: Lawyers use encrypted portals to safeguard sensitive information. This ensures that buyer and seller information, as well as transaction details, remain private and secure.
- Legal Requirement: Most provinces in Canada, including Ontario, require a licensed real estate lawyer to be involved in the closing process, whether it’s digital or in-person. This legal guidance prevents potential issues and ensures the property transaction is enforceable.
What Provinces Can I Virtually or Virtually Close In?
Currently, the only provinces that allow digital closing are Ontario and Alberta.
- Ontario: The Law Society of Ontario provides guidelines on remote real estate closings and the digital notarization process, outlining the provincial regulations on virtual closings.
- Alberta: The Government of Alberta also allows for digital real estate closings under specific legal frameworks, with clear information on electronic document signing and client-lawyer interactions online.
It’s important to note that Deeded is an official partner of the Law Society of Ontario.
How to Prepare Your Documents for Virtual Closing
A smooth digital closing relies on having all documents organized and readily accessible. The more prepared you are, the faster and smoother the closing experience will be. Here’s how to prepare for the process:
- Gather Necessary Documents
Work with your lawyer to collect property documents, financial statements, mortgage details, identification, and any other required paperwork. - Ensure Virtual Access
Make sure all documents are saved in PDF format for easy uploading and signing. Have scanned copies of your identification and proof of funds ready, as well. - Review Requirements with Your Lawyer
Go over each document with your lawyer to understand any specific requirements, such as signatures, notarizations, or witness signatures, depending on your province’s rules.
Benefits of Virtual Closings for Buyers and Sellers
For Buyers:
- Convenience: Buyers can sign and review documents from anywhere, reducing the need for in-person meetings.
- Reduced Costs: Fewer physical documents and in-person meetings can mean lower fees associated with the closing.
- Transparency: A digital portal lets buyers track every step, ensuring they stay informed.
For Sellers:
- Faster Transactions: Virtual closings speed up the sale process, which can be especially valuable in competitive markets.
- Simplified Communication: Sellers can communicate with their lawyer and buyer through the platform, reducing delays.
- Enhanced Security: Virtual transactions reduce the risk of lost or mishandled paperwork, offering peace of mind for sellers.
How Much Does Virtual Real Estate Closing Cost?
Virtual real estate closings offer a streamlined process for completing property transactions, typically at a cost-effective rate. At Deeded, the following rates apply for various transaction types:
- Purchase: $1,099
- Sale: $999
- Mortgage Refinance: $999
- Title Transfer: $999
- Change of Ownership: Starting at $499
While these rates provide a strong baseline, digital closings can occasionally cost more, particularly if the transaction is complex or involves rush services. The convenience and accessibility of digital closings, however, often make them a worthwhile investment, allowing all parties to complete transactions securely online.
Who Pays the Real Estate Closing Costs?
Typically, the responsibility for closing costs in a real estate transaction falls on the buyer, but this can vary based on local practices and the agreements made during negotiations. Closing costs often include legal fees, title insurance, land transfer taxes, and other related expenses. In some cases, sellers may agree to cover certain costs as part of the sale agreement to incentivize buyers
Are Real Estate Closing Costs Tax Deductible in Canada?
In Canada, real estate closing costs are generally not tax-deductible for personal residences. However, there are certain exceptions, especially for investment properties or rental properties. Here’s a breakdown:
- Personal Residence: If the property is your primary residence, you typically cannot deduct closing costs, including legal fees, title insurance, and land transfer taxes, from your income tax. These costs are considered part of the cost of purchasing the home and are factored into the adjusted cost base when calculating capital gains on the sale of the property in the future rental Properties and Investment Properties.
For properties used to earn rental income, many closing costs can be claimed as current expenses or added to the property's capital cost allowance. This includes costs directly associated with the acquisition of the property, such as legal fees, appraisals, and certain other closing expenses. When selling the property, these costs can also help reduce capital gains. - If you use part of your home for business purposes, you may be able to claim a portion of some closing costs as a deduction.
How Long Does It Take to Close Virtually on a Real Estate Transaction?
Virtual real estate closings with Deeded are efficient, typically taking between 5-7 business days from start to finish if all required documents are prepared and uploaded on time. For those needing a quicker turnaround, rush services are available. In some cases, closings can be completed in fewer than five business days when documents are properly prepared and reviewed early in the process.
The digital workflow not only speeds up the transaction but also ensures that clients, agents, and brokers are kept informed through a secure, real-time dashboard.
Can Real Estate Closing Documents Be Signed Electronically?
Yes, real estate closing documents can be signed electronically in Canada. Electronic signatures are legally recognized and enforceable, provided they meet the standards set out by the Electronic Transactions Act in each province. This allows parties to sign important documents securely online, streamlining the closing process. Many real estate platforms, including Deeded, utilize electronic signing solutions like DocuSign, which ensure that signatures are legally binding and compliant with provincial regulationsation on the legal acceptance of electronic signatures in Canada, you can visit the Government of Canada website here. You can also learn more on the Government of Ontario’s website.
Are Real Estate Closing Documents Public Record in Canada?
In Canada, real estate closing documents generally become part of the public record, especially documents related to property ownership, such as deeds and land titles. These records are typically maintained by provincial land registries, allowing the public to access information about property ownership and any associated liens or mortgages. However, certain sensitive documents, such as contracts and agreements between parties, may not be publicly accessible.
For detailed records and land titles, you can check the Land Registration Authority websites for specific provinces, such as the Ontario Land Registry here.
FAQ: Answering Common Questions About Digital Real Estate Closings
Q1: Are digital real estate closings legal in Canada?
Yes, digital real estate closings are legal and meet Canadian standards for secure electronic transactions. Real estate lawyers ensure all documents and digital signatures meet the legal requirements for each province.
Q2: What tools are used for digital closings?
Digital closings use secure document portals, electronic signature platforms like DocuSign, and video conferencing tools like Zoom for virtual meetings.
Q3: Can I complete a digital closing if I’m buying property in a different province?
Yes, digital closings allow for remote transactions, making it easier for buyers purchasing property outside their home province. Your lawyer will handle compliance with the laws of the property’s location.
Q4: How long does a digital closing take compared to a traditional one?
Digital closings can often be completed in a shorter timeframe—typically within a week—due to the streamlined, paperless process.
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